Founding father Benjamin Franklin was born and raised in Boston, so it’s somewhat fitting that the city’s rental market is now all about the Benjamins.
In a shocking development, new data shows Boston is poised to overtake notoriously expensive San Francisco as America’s second-priciest rental market, something unthinkable just months ago.
Bean Counting in Beantown
After an early pandemic exodus, most American big cities have seen rapid population growth since COVID-19 vaccines were rolled out last winter. That’s driven up rental prices in urban areas at the same time that home-buyers drove up prices in suburban areas. Both factors pushed US rent prices to an all-time high to kick off 2022. The median one-bedroom rent, according to Zumper’s National Index, is $1,374 this month, representing a 12% jump year-over-year.
The most fascinating product of the disruption is how three cities at the top of the list have played a game of overpriced musical chairs. San Francisco was famously America’s most expensive place to rent, but fell behind New York City, where a median one-bedroom now costs $3,260, in the summer of 2021.
That’s because San Fran’s high-tech workforce disproportionately adopted remote working, leading to stagnant rent growth as other markets have recovered. The tech capital of America is now on the verge of falling to third place:
- In the winter of 2019, renting a median one-bedroom in San Francisco was $1,300 more expensive than in Boston, but the pandemic exodus of wealthy and young residents sent both rental markets into freefall — the price for a median one-bed in Boston fell by 19.2% from March 2020 to January 2021, and in San Francisco fell 23.4%.
- However, Boston’s median one-bedroom rent has more than recovered, rising to $2,720 or 8.8% above its previous March 2020 peak and good for a new all-time high, while San Francisco rents are still down 18.6% at $2,850 and just $130 ahead of Boston.
Inflate Expectations: For some context as to just how big this year’s 12% year-over-year national rent increase is, the same figure was 0.6% in 2020 and 0.3% in 2019.